Selling the Benefits

"At 60 miles per hour the loudest noise in this new Rolls-Royce comes from the electric clock."—Ogilvy & Mather print ad for Rolls-Royce, 1957

For 20 years, I have had a love-hate relationship with advertising. It was on October 2, 1982, that I took the editorial helm of the English magazine Hi-Fi News & Record Review. Since then I have both cursed advertising for interrupting the articles, columns, and reviews I want to publish, and praised advertising for helping provide me with the resources necessary to publish those same articles, columns, and reviews (footnote 1).

So as an interested observer of what I regard as a necessary evil, I have opinions (footnote 2) about the activities of what Vance Packard called the "hidden persuaders." Packard's 1957 thesis was that the American advertising industry had replaced Barnum's tools of exaggeration and deception with concealed, almost subliminal symbols to maneuver consumers into buying goods they neither need nor want. Yet as persuasive as I found Packard's argument to be when I first read his book in the 1970s, I think he was, in the main, wrong.

I have come to believe that advertising works when it shows potential customers the benefits they will experience from a product. The two advertising campaigns mentioned above are classic examples of "selling the benefits." By contrast, a large proportion of current advertising is devoted to "selling the features." Compare the two ads above—the Volkswagen ad is a contemporary of this magazine, which celebrates its 40th birthday in November 2002—with current car ads stressing engine capacity, horsepower, and performance. It is left to the eventual customers to decide whether these features are benefits or not, which might be one reason so many car ads end up devoted to a single undoubted benefit: price.

"What if they gave a format war and nobody came?" asked Stereophile's webmaster, Jon Iverson, in this space last month, with respect to SACD's and DVD-Audio's lack of market penetration. Both sides insist there is no format war, this being something invented by editors to sell magazines. Yet there is a format war, because when an audiophile goes into the store to buy a new player, he must make an either/or decision about which format to support and which to ignore. That hardware purchase decision then dictates which software he will buy and which he will leave on the shelf.

Yes, there have been a few players that play both SACD and DVD-A, such as the Pioneer DV-AX10, which we reviewed in February. But according to a July 28 poll on the Stereophile website, the primary reason given by the 52% of respondents who so far have resisted buying into either format is that they don't want to have to make a choice between them.

While a third of poll respondents claimed that they had bought SACDs, just 13% said that they had purchased a DVD-A disc. This relative lack of market penetration is perhaps one reason the hardware companies behind DVD-A held a series of seminars in August to promote the medium to the press and to record-label executives. Jon Iverson and I attended these seminars—you can find Jon's blow-by-blow account in our on-line news—and came away bothered by an asymmetry in how the medium was being marketed.

Like Jon, I worry that DVD-A and SACD appear to have been designed around the stated needs of the record companies and therefore offer them unambiguous benefits: encrypted data, a nonstreamed file structure, and no access to the hi-rez digital data, all to prevent "ripping" and piracy; robust (audible) watermarking, to allow pirated copies to be traced; lack of "portability," in that copies are of deliberately degraded quality; erosion of the customers' "fair use" and "first sale" rights; and the opportunity to re-sell their back catalogs to the same customers.

By contrast, end-users are offered features: theoretically higher sound quality, multiple channels, and surround sound (SACD, DVD-A); and video and ROM content, artist interviews, discographies, "making of" documentaries, and slide shows (DVD-A). But more important, consumers are losing benefits they currently enjoy with CD in favor of these features.

For example, market research clearly shows that unless a medium's content is portable (can be easily moved from one format or device to another), it will not catch on. The ability to make compilation CD-Rs for the car or MP3s for your iPod—perfectly legal activities—are significant consumer benefits. The SACD camp has shown awareness of this fact by focusing its recent marketing efforts on hybrid discs whose CD layers can be copied, yet DVD-A has eliminated portability.

A benefit to consumers of current media is that what you see is what you get. With DVD-A, however, this is no longer true. Some titles have DTS, some don't. Some have hi-rez two-channel mixes, some have fold-downs. Some have hi-rez multichannel mixes, some do not. All titles are supposed to have Dolby Digital audio data for back-compatibility with DVD-V players, but some do not. Some have added-value content, some do not. You don't know what you've bought until you play the disc at home.

If DVD-A and/or SACD are to supplant CD, not only do their features have to be transformed into benefits, but the benefits consumers currently enjoy with CD need to be preserved. That means no watermarking to damage the benefit of improved sound quality, hi-rez digital outputs, and all the first-sale and fair-use freedoms owners expect. If the record industry doesn't allow SACD and DVD-A to offer people what they want, there is no law that compels them to become customers, no matter how much the record industry appreciates the new formats' benefits.

Footnote 1: A year's Stereophile subscription currently costs $19.95; without the income from advertising it would have to rise significantly—perhaps to as much as $200, if the effects of price elasticity are taken into account.

Footnote 2: As well as by Packard's The Hidden Persuaders (Random House, 1957) and Joe McGinniss' The Selling of the President (Trident Press, 1969), my thoughts on advertising have been influenced by two of David Olgilvy's books on the subject: Ogilvy on Advertising, Vintage Books (1985), and Confessions of an Advertising Man, Atheneum (1963).